vendor passed away before settlement!

Discussion in 'Legal Issues' started by jsoe, 9th Sep, 2011.

  1. TMNT

    TMNT Member

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    Ok sorry, I was confusing

    I'll put it bluntly

    Im looking at two strategies with the least possible tax

    1. Spend all my equity away while I'm alive ie refinance just before I die, spend it all, give it to kids, buy property in their name, when I die, everything gets sold off, and I'll have pretty much zero left, but then I'll get a huge cgt bill but the debt will die with me

    2. Spend little, gets passed onto my kids with zero tax upon transfer upon my death, is this possible, so kids inherit portfolio with low lvr, and can rely on future cg
     
  2. antistar

    antistar Member

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    Yup they get a bit agressive! Luckily it wasn't me:)
     
  3. Terry_w

    Terry_w Member

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    1. Is possible but the normal rules of bankruptcy apply so transactions to defeat creditors can be clawed back and undermarket value transfers too - includes gifts to children.

    2. Kids would inherit CGT pregnant assets with the CGT coming in when they eventually sell.
     
  4. allegria

    allegria Member

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    Could settlement take place if the deceased vendor had already signed the Transfer?

    Titles wouldn't know about it but whether down the track various agencies (e.g. state revenue) link up dates with ATO and realise the vendor was deceased at settlement and cause a problem?
     
  5. Terry_w

    Terry_w Member

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    Not sure off the top of my head, but think that it would be possible.
     
  6. jrc

    jrc Member

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    If settlement had not taken place prior to the death, then even if there was a signed transfer, settlement should not occur. From memory, immediately upon death Section 45 Probate & Administration Act says upon death the property vests in the deceased's executor or administrator. The executor/ administrator can only deal with the property to transfer title after probate or letters of administration are granted. I would suspect that a solicitor or conveyancer who settled after they knew the vendor was deceased would have a lot of explaining to do.
     
  7. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    I prefer executed solicitors
     
  8. Terry_w

    Terry_w Member

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    But if there is a signed transfer the transferor has done everything needed for completion to occur, except for registration. I am not sure your answer is correct.